Posted By:
Al C.risafulliI would imagine that a consignor who has material with an auction house that gets shut down by the government would have to wait for things to get sorted out, but they will get sorted out and the consignor will get his/her material back. Not sure how long this would take, and I'm sure it would be uncomfortable for those people.
As far as bankruptcy goes, I would think that would be less of a concern, particularly if it's a Chapter 11 bankruptcy. I would imagine that in a case like that, the auction house would continue doing business while it reorganizes, with consignors receiving payment for their material. More of a concern would be the timeliness of that payment, coupled with a loss of bidder confidence that might result in lower hammer prices.
I do not see a major panic happening with respect to the hobby, however. The autograph business seems to continue thriving, despite all the Federal investigations into that business and the resulting doom-and-gloom. I remember reading at one point that as much as 70% of autographs could be fake. Doesn't seem to stop people from shelling out big dollars for them.
Ultimately a shakeout in the hobby will likely result in the more reputable auction houses gaining market share. That would be a good thing for us as consignors and as bidders, as it always inspires confidence to deal with a reputable firm.
As far as a "depression" is concerned, I am no economic genius, but I don't see it happening. We have a long, long way to go before unemployment reaches the levels to trigger a true panic or a very lengthy downturn. Those of us who are involved with this hobby for the sheer joy of immersing ourselves in the history of the game and its collectibles will benefit from those of us who are involved in the hobby for investment purposes, and therefore panic about the value of their investments deteriorating. My limited experience indicates that panic selling of ANY investment is not a great idea if you're a long-term investor; those people getting out of the hobby will only create buying opportunities for those of us who view this as more of a hobby. I'm not saying there's a right or a wrong way to collect - there isn't - but I am saying that as long as there are sellers, there will be buyers.
-Al